CNN.com reports that, anticipating the “feeling rich” effect of the upcoming Facebook IPO, local folks in Palo Alto are going bananas in anticipation of the new wave of Silicone Valley rich boys rushing out and overpaying for homes in the wake of making serious money on their Facebook shares which they mean to buy as soon as the Facebook IPO becomes reality. David A. Kaplan, Silicon Valley Real Estate: The Facebook Effect, April 30, 2012 — click here ).
“Though the number of actual prospective home buyers with Facebook connections is only a fraction of all buyers in the Valley, their psychological effect on the market is unmistakable. In Palo Alto, in particular — which Mark Zuckerberg calls home –sellers are either keeping their homes off the market until the IPO or ramping up expectations. For the first quarter of 2012, according to BrokerMetrics, the median price of a single-family P.A. home went up 11%, whereas inventory declined 57%.”
Which nicely illustrates one of the things that are wrong with California: when the ol’ homestead rivals hot securities investments, you know things are in bad shape, with another “bubble” being blown up by people who have more money than sense.